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Almost half of corporate tech leaders are recovering from the nasty shock of finding out there was nothing final about their boss’s promise of their finalised IT budget. Mainly due to the top brass understanding the slowdown more, or cementing their response to it, the CIOs say their recently set IT budgets show cuts of up to 10%. The downward revisions, which affect 46% of CIOs in all major sectors, came in the first quarter of this year, and signal the majority will cut their IT spending by 7%. Analysts at Gartner, who measured how IT budgets are faring in the fiscal wobble, compared the fall in budgets with predictions in December that they would hold up. At the time, CIOs said their finalised IT budgets for the year would effectively freeze, with a minor increase of 0.16%, indicating IT spending would defy the downturn. But while more than half now say their IT spending for 2009 will match last year’s, the cuts by nearly as many means the total spend of all CIOs will actually dip by 4%. Exactly how the cuts will take shape will vary, though Gartner said reducing headcount and renegotiating contracts with external IT vendors were top of the list. Bernie Potton, managing director of SQ Computer Personnel, said he expected to see “much belt-tightening” in firms that use contract IT suppliers in the coming months. “I think the view that the [IT jobs] market may have reached its bottom and beginning to turn is based on optimism rather than any firm figures or facts,” he said. “We are still finding…our PSL clients not doing much recruiting, permanent or contract, with the obvious difficulties in opening up new clients when they're not recruiting too.” Gartner also found that, rather than outsourcing, CIOs are prioritising in-house resources to absorb IT work, and are delaying new purchases before cutting IT investment projects. While they recognised the potential for further cuts to their IT budgets, most see that as “unlikely,” said the firm, which has advised all CIOs to set a recovery budget by July 1st. Yet CIOs are less confident: partly perhaps because of the recent downgrades, they said the economy, and then IT budgets, would recover between the first and third quarter of 2010. IT investment projects and workforce levels will be the first priority in the recovery, while software, hardware and infrastructure investments are also high on the CIO’s agenda. Jun 10, 2009 Email this article Printer friendly page Previous Page
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